Lower Open — Watch Your Back!
A sharp
pickup in the intensity of bombing attacks in
Israel, extremely poor economic reports in Europe, and follow through from
Friday’s poor performance here has the markets set to open lower this morning.
Currently DJI futures at the Board are 30.0 points lower, S&P futures at the
Merc are 3.70 points lower, and Nasdaq 100 futures are 4.50 lower. Russell 200
futures are roughly unchanged, while the dollar and interest rate futures are
slightly higher. London gold fixed $2.10Â higher at $307.60. At 09:00 CDT we have
non-manufacturing ISM set to be released, with consensus expectations of 55.0
versus last month’s 57.2.
Suddenly, out of the blue, Europe and the U.S. are showing economic weakness,
and this definitely puts rate cuts on the front burner, and we may not have to
wait until August 13 to see them, so be vigilant and keep a tight leash on all
of your short-term positions. Some day it will be time to buy — not today!
Volatility
Volatility popped Friday with the sell off. The VIX gained 3.90 to 45.39, the
VXN picked up 5.09 to 65.44, and the QQV rose 4.12 to 54.84.
Trade Updates (Friday 8/02/02)
CIEN – We bought the January 2.5 / 5 reverse collar for $.40 (25%).
DJX – We bought the August 86 / 90 1:2 ratioed call spread for $.50 (50%).
IBM – We bought the January 50 / 60 put spread for $2.50 (25%).
New Actions (New Recommendations)
None
Orders (Old Recommendations)
BAC – Buy the January 50 / 60 put spread at $2.00 (25%).
MMM- Buy another 25% of the MMM October 110 / 120 put spread at $2.00.
Working Rolls/Adjustments:
None
Recap of open trades:
Long-term
Reverse
Collars:
CIEN – Long the January 2.5 / 5
reverse collar at $.40 (25%).
Buy-writes:
AOL – long the July 22.5 buy-write at $19.40 (50%). July has expired,
looking to roll into January ’03.
AOL -long the October 20 buy-write at $16.30 (25%).
HAL -long the January 15 buy-write at $12.05 (100%).
Proxy buy-writes:
DYN – long the January 15 calls at $3.20 – left over from proxy buy-write
(50%). Left for dead.
Complex Strategies:
None
Directional Positions:
AMGN – long the January 30 /40 put spread at $2.50 (50%).
BAC – Long the January 50 / 60 put
spread at an average price of $2.75 (50%).
IBM – Long the January 50 /60 put spread at $2.50 (25%).
Short-termÂ
Call Positions:
None
Call Spread Positions:
DJX – Long the August 86 /90 call ratio spread 1:2 for $.50 (50%).
QQQ – Long the August 26 / 28 1:2 call ratio spread for even money (25%).
QQQ – Long the August 26 / 28 / 30 “Christmas tree” at $.35 (25%).
Put Positions:
IWM – Long the August 70 puts at $2.00 (25%).
Spread Positions:
C – Long the December / August 30 put calendar spread at $1.70 (25%).
C – Long the December / September put calendar spread at $1.00 (25%).
MMM – Long the October 110 / 120 put spread at an average price of $2.87 (75%).
Stops
AOL – Two consecutive
closes below $10.00 or one close below $9.64.